Suppose,to Produce $200,000 Worth of Finished Cloth in the US,textile

question 48

Multiple Choice

Suppose,to produce $200,000 worth of finished cloth in the US,textile producers import $150,000 of raw materials.The raw materials are imported duty free.However,the US has imposed a 5% nominal tariff on imports of finished cloth.What is the effective rate of protection enjoyed by the domestic cloth producers in the US?

• A)20%
• B)10%
• C)5%
• D)6%

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